Question

Explain the criteria which have been evolved for evaluating the financial desirability of a project.​

Answer 1

Answer:

Explanation:

Net Present Value (NPV)

It is the most widely accepted criterion for selecting between projects.

Answer 2

The criteria evolved for evaluating the financial desirability of a project are:-

• Playback period analysis: It measures the amount of time which it would take to recoup in the form of Net Cash Inflows and Net initial investment in the project.
• Accounting Rate of Return: It calculates the return of the project by taking the annual net income and dividing it by the initial investment in the project.
• Net Present Value: It calculates the net expected monetary gain or loss from the project by bringing the net cash inflows and outflows at the present point of the time.
• Internal Rate of Return: It gives the Average Annual rate of return from the project.